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Amgen is Canning 300 Onyx Staffers, Abandoning Campus in the Latest Biopharma Purge

Wednesday, March 11, 2015   (0 Comments)
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From FierceBiotech
By Damian Garde

Days after Onyx Pharmaceuticals' banner drug came through in a big Phase III trial, Amgen ($AMGN) is laying off about 40% of the subsidiary's staff, shedding roughly 300 workers amid widespread cuts around the industry.

As Xconomy first reported, the Big Biotech is shutting down Onyx's South San Francisco operation by the end of 2015, abandoning its campus and planning to absorb some remaining employees into its Thousand Oaks, CA, headquarters. CEO Bob Bradway detailed the plan in a memo on Monday, saying the cuts are part of a broader effort to combine the oncology departments of each company. The move would seem to disproportionately affect R&D staff compared to marketing, as Bradway noted that all U.S. Onyx sales reps would be offered new jobs within Amgen. A spokesperson for the company emphasized to FierceBiotech, though, that a variety of jobs are being cut and that some R&D jobs are being integrated into other Amgen facilities.

"While I recognize this will be difficult news for our colleagues in Onyx, I want to extend my gratitude and appreciation for everything Onyx has achieved over the years in support of cancer patients," Bradway wrote. "Consistent with our efforts to consolidate our geographic footprint, we expect to vacate our Onyx site."

The news comes just one week after Amgen revealed that Kyprolis, the blood cancer drug at the heart of its roughly $10 billion acquisition of Onyx, beat out Takeda's blockbuster Velcade in extending progression-free survival for patients with relapsed multiple myeloma. The results led many analysts to boost their peak sales estimates for the drug, which cleared just $331 million last year, and was widely seen as an affirmation of Amgen's faith in Onyx.

Meanwhile, Amgen is in the midst of cutting about 20% of its global headcount--nearly 4,000 jobs--in an effort to save more than $1.5 billion by 2018. The company has faced continued pressure from investors and analysts who take issue with its moonshot bets on R&D. But the repeated cuts, which began last year, have improved its standing on Wall Street: Amgen's shares have risen about 33% since July, when it disclosed its first big round of layoffs.

Amgen has yet to file a required WARN notice with California about the current layoffs, according to officials in the state. Their last notice went out October 22, just days before Amgen laid out plans to boost its projected restructuring cuts with an additional 1,100 layoffs. The Big Biotech told the state that it planned to drop the ax on 349 staffers at its Thousand Oaks campus in the last 9 days of the year.

Amgen's post-merger slashing at Onyx fits in with a widespread industry practice that has made it increasingly difficult for researchers to feel secure in Big Pharma. Thus far in 2015, Merck ($MRK) has unveiled plans to ditch more than 100 employees from the recently acquired Cubist Pharmaceuticals, while Sanofi ($SNY) has scaled back its oncology operation at the cost of about 100 jobs, and Shire ($SHPG) has hinted at a "mass layoff" tied to its R&D relocation. Pfizer, meanwhile, has been cutting R&D again as well while AstraZeneca prepares to spin off its anti-infectives unit into an independent biotech with about 25 staffers.

- read Bradway's memo

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